Manure management coupled with bioenergy production: An environmental and economic assessment of large dairies in New Mexico

Highlights: • Proper manure management is challenging for concentrated animal feeding operations. • Anaerobic digestion of manure is relatively profitable for large dairy farms. • Anaerobic digestion coupled with microalgae shows highest environmental benefits. • Nutrient credits significantly improve economic benefits of anaerobic digestion. - Abstract: Consolidation in livestock production generates higher net farm incomes due to economies of scale. However, it also brings manure disposal problems. New Mexico ranks number one in the U.S. in dairy herd size. Dairy manure is a significant source of nitrates, and improper management of manure from large dairy farms can produce adverse environmental and health effects. We use a combination of life-cycle assessment, cost-benefit analysis, and sensitivity analysis to assess environmental and economic impacts of three alternative dairy manure management cases: direct land application (DLA), anaerobic digestion (AD), and anaerobic digestion coupled with microalgae cultivation (ADMC). By modeling a typical large dairy farm in New Mexico, four environmental impacts and the present value of net benefits of each case are evaluated under a baseline scenario and different policy scenarios. Our results show that, for a typical large dairy farm in New Mexico, the DLA case is the least sustainable regarding any of the environmental impacts. AD is most profitable in the baseline, tax credit, and carbon credit scenarios while ADMC is most profitable in the presence of a market for nutrient credits. Policy implications are discussed for dairy manure management coupled with bioenergy production on large dairy farms in arid regions.